Interim Results

Pathfinder Properties PLC 30 September 2003 30 September 2003 PATHFINDER PROPERTIES PLC INTERIM STATEMENT for the six months ended 30 June 2003 CHAIRMAN'S STATEMENT Only three months have passed since I last reported on the affairs of the Group regarding the accounts for the year ended 31 December 2002, but they have been a busy three months and the Group continues to progress its announced development plans to realise shareholder value. I am pleased to announce that your Group is in the final stages of agreeing two contracts for the sale of, respectively, 2.7 acres of cleared site and the listed buildings at our site at Newark to specialist developers for complementary projects conditional upon planning permission being obtained. The base price on these contracts is £3.02 million. The balance of the site, amounting to some 1.4 acres, adjacent to the Newark riverfront, is the most valuable and is being retained by the Group for development as 112 apartments and 3,000 sq ft of retail space. The Group has been advised that the residential development value of the retained site substantially exceeds its book cost. We have offers of finance for this development and, again subject to planning, we would hope to start construction on site in the new year. We have received a formal offer of finance, which is acceptable to the Group, to fund phase 1 of River Quarter, Manchester, which would allow construction of this £37 million end-value scheme to commence in Spring 2004, with the first elements being released to the market at the same time. Finally, the Group has completed the acquisition of a site in central Wetherby, Yorkshire, for a mixed use scheme comprising 24 apartments and 13,400 sq ft of retail and restaurant space. The Group is in discussion with potential funders for a planned start on site in Spring 2004 and completion by Summer 2005. We are already in discussion to lease the whole of the ground floor retail space to a major high street retailer. The interim financial statements for the six-month period ended 30 June 2003 record losses arising from the ongoing business that are inevitable given our policy of writing off interest and management costs directly to the profit and loss account during the early stages of development projects. The Group is not proposing to pay an interim dividend this year. A decision on payment of a final dividend will depend on the progress of the development programme. The balance sheet changes in the period, other than the loss for the period, principally reflect two transactions. First, it includes the exchange on the Wetherby site, which had taken place at 30 June 2003 subject to certain conditions, which have now been satisfied. Secondly, it shows the acquisition in March 2003 of the remaining external 20% interest in Pathfinder (River Quay) Limited in exchange for shares in Pathfinder Properties PLC and cash. The recognised value of the assets acquired exceeded the consideration paid. This completes our acquisition of the outstanding River Quay interests. John Parry Chairman 29 September 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ended 30 June 2003 Notes 6 months to 6 months to Year to 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 TURNOVER Group and share of joint ventures 4 - 2,100 17,490 less share of joint ventures - (2,100) (2,100) -------- ------- -------- Group turnover - - 15,390 Cost of sales 35 (21) (13,980) -------- ------- -------- Gross profit 35 (21) 1,410 Administrative expenses (744) (739) (1,451) -------- ------- -------- (709) (760) (41) Other operating (expense)/income (73) 130 158 OPERATING (LOSS)/PROFIT BEFORE SHARE -------- ------- -------- OF JOINT VENTURES (782) (630) 117 Share of operating profit in joint ventures 5 417 352 -------- ------- -------- OPERATING (LOSS)/PROFIT 4 (777) (213) 469 (Loss)/Profit on sale of investment properties (4) - 66 -------- ------- -------- (781) (213) 535 Interest receivable 114 107 263 Interest payable (373) (388) (910) -------- ------- -------- LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (1,040) (494) (112) Taxation Group 204 259 (296) Joint 44 27 212 ventures -------- ------- -------- LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (792) (208) (196) Equity minority interests 5 8 93 LOSS ON ORDINARY ACTIVITIES -------- ------- -------- ATTRIBUTABLE TO MEMBERS (787) (200) (103) Ordinary dividends - - (173) -------- ------- -------- Loss for the period transferred to reserves 7 (787) (200) (276) ======== ======= ======== Loss per share 11 (0.99p) (0.25p) (0.13p) The operating loss/profit arises from the Group's continuing operations. A statement of total recognised gains and losses for the period is given in note 9. CONSOLIDATED BALANCE SHEET at 30 June 2003 Notes 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 FIXED ASSETS Intangible fixed assets 18 622 142 Investment properties 8 47 32 Fixed assets - equipment, fixtures 16 - - and fittings Investment in joint ventures --------------------------------------- Share of gross 3,326 2,534 3,274 assets Share of gross liabilities (1,980) (1,888) (1,839) Goodwill 51 - 51 --------------------------------------- 1,397 646 1,486 Investment in own shares 1,861 2,345 2,729 Other Investments 152 152 152 -------- -------- ------- 3,452 3,812 4,541 -------- -------- ------- CURRENT ASSETS Work-in-progress 17,418 27,440 15,365 Debtors 5 937 884 913 Cash at bank 3,938 4,559 6,474 -------- -------- ------- 22,293 32,883 22,752 CREDITORS: Amounts falling due within one year 6 (7,205) (9,947) (3,926) -------- -------- -- ------- NET CURRENT ASSETS 15,088 22,936 18,826 -------- -------- ------- TOTAL ASSETS LESS CURRENT LIABILITIES 18,540 26,748 23,367 CREDITORS: Amounts falling due after more than one year Bank and other loans (3,999) (10,440) (7,330) PROVISIONS - (14) - -------- -------- ------- 14,541 16,294 16,037 MINORITY INTERESTS (459) (1,164) (1,079) -------- -------- ------- NET ASSETS 14,082 15,130 14,958 ======== ======== ======== CAPITAL AND RESERVES Called up share capital 7,990 7,975 7,975 Share premium account 1,962 1,946 1,946 Revaluation reserve 193 527 431 Capital reserve 2,494 2,494 2,494 Profit and loss account 7 1,443 2,188 2,112 -------- -------- ------- EQUITY SHAREHOLDERS' FUNDS 8 14,082 15,130 14,958 ======== ======== ======= Net assets per share attributable to ordinary shareholders 17.62p 18.97p 18.76p CASH FLOW STATEMENT for the six months ended 30 June 2003 Notes 6 months to 6 months to Year to 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 NET CASH (OUTFLOW)/ INFLOW FROM OPERATING 10 (1,232) (3,771) 10,804 ACTIVITIES -------- -------- -------- RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 44 56 238 Interest paid (108) (207) (545) -------- -------- -------- Net cash outflow from returns on investments and servicing of finance (64) (151) (307) -------- -------- -------- TAXATION -------- -------- -------- Corporation tax paid - - (57) -------- -------- -------- CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Receipts from sales of investment properties 20 - 81 Receipts from joint ventures - 1,675 730 Acqusition of other tangible fixed assets (26) - - Net cash (outflow)/inflow from capital expenditure -------- -------- -------- and financial (6) 1,675 811 investment -------- -------- -------- ACQUISITIONS AND DISPOSALS Acquisition of minority interests in subsidiary (1,079) - - Purchase of subsidiary undertaking - - (1,069) Net cash acquired with subsidiary undertaking - 1,702 1,702 -------- -------- -------- Net cash (outflow)/inflow from acquisitions and disposals (1,079) 1,702 633 -------- -------- -------- EQUITY DIVIDENDS PAID -------- -------- -------- Minority dividends paid (180) - - -------- -------- -------- MANAGEMENT OF LIQUID RESOURCES -------- -------- -------- Decrease/(Increase) in treasury deposit accounts 1,016 - (1,866) -------- -------- -------- FINANCING Debt due within a year: Loans drawn down 5 726 726 Loans repaid - - (8,309) Debt due in more than one year: Loans drawn down 20 1,861 2,800 Loans repaid - (2) (3,146) -------- -------- -------- 25 2,585 (7,929) -------- -------- -------- (DECREASE)/INCREASE IN CASH (1,520) 2,040 2,089 ======== ======== ======== NOTES for the six months ended 30 June 2003 1 BASIS The figures shown for the six months to 30 June 2003 and 30 June 2002 are unaudited and do not constitute statutory financial statements within the meaning of the Companies Act 1985. The financial statements for the year ended 31 December 2002 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under s.237 (2) or (3) of the Companies Act 1985. 2 ACCOUNTING POLICIES The accounting policies adopted are consistent with those applied in the previous year. Investment properties are stated at valuation on 31 December 2002 or cost at the date for acquisition, if later, together with the addition of costs of enhancement works since that date where appropriate. Investment properties have not been revalued at 30 June 2003. The investment in Pathfinder Properties PLC held by a subsidiary of the Group has been revalued by the Directors at 30 June 2003 on the basis of the reported net asset value of the Group at that date. 3 ACQUISITION OF REMAINING INTERESTS IN PATHFINDER (RIVER QUAY) LIMITED On 14 March 2003, the Group acquired the outstanding 20% interest in Pathfinder (River Quay) Limited. Consideration for the acquisition amounted to £1,034,500 in cash and the transfer of 3,989,800 shares in Pathfinder Properties PLC owned by the Group. 4 RESULTS FOR THE PERIOD The Group's turnover and results arise principally from property development activities. The acquisition of the remaining interests in Pathfinder (River Quay) Limited have no effect on turnover or operating loss of the Group. The loss for the period is after taking into account: 6 months to 6 months to Year to 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 Costs incurred in connection with the settlement of legal action and unwinding of joint ventures - 111 111 Costs incurred in respect of the tender offer by, and Extraordinary General Meeting called by, Sunnyview Limited 122 - 39 ========== ======= ======== 5 DEBTORS 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 Due within one year 571 794 724 Due after one year: deferred tax 366 90 189 ---------- ------- -------- 937 884 913 ========== ======== ======== 6 CREDITORS DUE WITHIN ONE YEAR 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 Bank loans and overdrafts 2,942 4,907 - Other development loans 565 3,079 1,328 Other creditors and accruals 3,698 1,961 2,598 ---------- ------- -------- 7,205 9,947 3,926 ---------- ------- -------- 7 PROFIT AND LOSS ACCOUNT 6 months to 6 months to Year to 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 Brought forward 2,112 2,388 2,388 Transfer from revaluation reserve 118 - - Retained loss for the period (787) (200) (276) ---------- ------- -------- Carried forward at end of period 1,443 2,188 2,112 ========== ======== ======== 8 SHAREHOLDERS' FUNDS 6 months to 6 months to Year to 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 Loss for the period (787) (200) (103) Dividends - - (173) Shares issued in period 31 - - Revaluation of investment in own shares (120) 527 431 ---------- ------- -------- (876) 327 155 Brought forward 14,958 14,803 14,803 ---------- ------- -------- Carried forward at end of period 14,082 15,130 14,958 ========== ======== ======== 9 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 6 months to 6 months to Year to 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 Loss for the period attributable to members (787) (200) (103) Revaluation of investment in own shares (120) 527 431 ---------- ------- -------- Total recognised gains and losses relating to the period (907) 327 328 ========== ======== ======== 10 RECONCILATION OF OPERATING PROFIT TO OPERATING CASH FLOWS 6 months to 6 months to Year to 30 June 2003 30 June 2002 31 Dec 2002 £'000 £'000 £'000 Operating (loss)/profit (777) (213) 469 Depreciation and amortisation of goodwill 10 - 145 Share of operating profits in joint ventures (5) (417) (352) (Increase)/decrease in work-in-progress (1,682) (1,718) 10,356 Decrease in debtors 46 212 217 Increase/(decrease) in creditors 1,176 (1,541) 63 Decrease in other provisions - (94) (94) ---------- ------- -------- (1,232) (3,771) 10,804 ========== ======== ======== 11 LOSS PER SHARE The loss per ordinary share is based on the loss after taxation and minority interests and on 79,812,478 (31 December 2002: 79,745,428) ordinary shares being the weighted average number of ordinary shares in issue during the period. There is no difference between earnings and fully diluted earnings per share. DIRECTORS AND COMPANY INFORMATION Directors Company number John Parry, Chairman 2578942 (England and Wales) Malcolm Bacchus George Heggie Registered office Claire O'Connor 10 Dover Street London W1S 4LQ Secretary Badger Hakim Secretaries Limited A copy of this statement is being sent to all shareholders and further copies may be obtained from the company by writing to Pathfinder Properties PLC, Capital House, Michael Road, London SW6 2YH, from the FT Free Annual Reports Service, details of which can be found in the Financial Times, or from the Company's website at www.pathfinderplc.com. For further information, contact: John Parry, Chairman Malcolm Bacchus, Director Telephone (020) 7736 9669 Jeremy Carey, Tavistock Communications Limited Telephone (020) 7920 3150 This information is provided by RNS The company news service from the London Stock Exchange
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